At least 35 people have been killed in ongoing attacks on several military checkpoints and police stations in Egypt's northern Sinai, security sources and witnesses have told Al Jazeera.
About 70 fighters of a group calling itself the Province of Sinai simultaneously attacked several targets in the area on Wednesday, the sources said.
At least 22 of the fighters were killed and three of their vehicles were destroyed, the sources added.
However, Egypt's military issued a statement later on Wednesday, saying that only 17 soldiers and more than 100 attackers died in the Sinai unrest.
"We will not stop until the Sinai Peninsula is purified of all the hideouts of those terrorists," the army spokesman said in the statement.
The group Province of Sinai was previously called Ansar Beit al-Maqdis (Champions of Jerusalem), but announced a name change in November 2014 when it pledged allegiance to the Islamic State of Iraq and the Levant (ISIL) .
The Province of Sinai group, which was founded after the military-backed toppling of former President Mohamed Morsi, had originally targeted Israeli border installations, but soon shifted onto Egyptian government forces.
Hundreds of Egyptian soldiers and police officers have since fallen victims to attacks staged by the group.
Egypt's air force deployed fighter jets to the region to assist the army in the ongoing battle, Al Jazeera has learned.
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There were also reports that Israel has closed down its shared border crossings with Egypt.
Sources told Al Jazeera that all Egyptian security forces at two checkpoints at Sheikh Zuweid were killed.
The mortuary in El-Arish received at least 35 bodies, Egyptian security sources said, adding that at least 11 soldiers were among the dead.
However, local media reports suggested the death toll of the attacks could be much higher.
The Egyptian daily Al Ahram reported that there had been no official death toll because ambulances had trouble reaching the injured and killed for fear of getting caught in the crossfire.
In response to the attack, Ibrahim Mahlab, Egypt's prime minister, said his country was in a state of war.
His cabinet approved an anti-terrorism draft law that he said would provide "quick and just deterrence" against "terrorism". The draft law awaits President Abdel-Fattah el-Sisi's approval before it can be passed by decree.
Egyptian media reported earlier that the legislation would give prosecutors more powers to detain suspects for long periods of time and enable authorities to inspect the bank accounts of those facing terror-related charges.
Wael Abbas, an Egyptian journalist and blogger, told Al Jazeera that the attack was highly "coordinated" and that there were reports that the fighters had put mines on the roads to prevent more Egyptian military vehicles from accessing the area.
He said some supporters of ISIL had tweeted that they were going "to eradicate the military's presence in Sinai" before the attacks.
"It seems that the Islamists just like in Iraq and Syria want Sinai to go to the Islamic State [ISIL]," Abbas said.
The power was cut in Sheikh Zuweid and residents were staying indoors, as the clashes continued, witnesses told Al Ahram.
Police stations in the towns of Sheikh Zuweid and El-Arish were among the targets of the attacks, witnesses said.
Sources told Al Jazeera that fighters took over two tanks at one of the checkpoints.
Fighters have launched many attacks killing hundreds of police and soldiers in the northern Sinai in recent months.
Source: Al Jazeera and agencies